WHY THIS MATTERS IN BRIEF
Bitcoin’s energy consumption is huge, rivalling most nations, and its unsustainable so people are trying to create “green” alternatives.
Bitcoin and other cryptocurrencies that run on the blockchain are changing the world. And they’re also helping fuel climate change and destroy it thanks to their huge energy demands which is still a problem in search of a solution. While Microsoft have developed blockchains like IOTA that work on a Proof of Authority basis, rather than Proof of Work basis like common-a-garden blockchains, which don’t consume huge amounts of computing power and therefore energy, no other real alternatives exist to the energy gobbling technology. But slowly that is starting to change as developers around the world sit up and take notice.
Cryptocurrencies based on owning a large number of hard discs, rather than using computer processors, could offer a less energy intensive alternative to Bitcoin and might even make it cheaper to build data centres – although that said one such “green” cryptocurrency, Chia, is already causing soaring demand for hard discs and is disrupting supply chains.
Bitcoin and several other popular cryptocurrencies are created, or mined, using a concept called Proof of Work, which involves solving computationally difficult puzzles that consume a large amount of electricity. Bitcoin’s annual electricity consumption is estimated to be 148 terawatt-hours and rising, or around the same amount as Poland’s. So, now rival currencies are emerging that instead make use of large numbers of empty hard discs instead – a concept known as Proof of Space.
Because hard drives are less energy-intensive to run than processors, Proof of Space currencies are touted as being more environmentally friendly. However, demand for one such currency, Chia, has become so high that some Asian countries, such as Vietnam, are reporting shortages of hard discs. The same phenomenon occurred with graphics cards, which proved to be extremely efficient at mining certain Proof of Work cryptocurrencies. Currently, around 3 million terabytes of hard disc space are being devoted entirely to mining Chia, enough to store 3 billion movies.
Jason Feist at hard drive manufacturer Seagate says the company is experiencing strong orders and that staff were working to “adjust to market demand.” He also suggested that these new cryptocurrencies could provide a way for companies building large data centres to offset the cost by turning them over to mining.
Meanwhile Michel Rauchs at the University of Cambridge says that while bitcoin’s Proof of Work approach is well understood, Proof of Space alternatives are still in their infancy.
“Other consensus algorithms that are less energy intensive but also introduce some level of centralisation and subjectivity might be an acceptable trade off. There are always trade offs involved, most of which tend to only become known over time,” he says.
Aron Peterson, who works in digital production for the film industry in the UK, says that people in his field started to notice the price of computing hardware creeping above manufacturer listed prices around six years ago. He puts it down to the demand for graphics cards by cryptocurrency miners.
“It was causing frustration among creatives and gamers who didn’t want to purchase upgrades at inflated prices just because other people were wasting huge amounts of electricity to compete for digital tokens,” he says.
After deciding to try mining himself Peterson found that it was using huge amounts of electricity, and he also predicted it would take him five months at the rate he was going before he could mine any coins.
“Obviously I wasn’t going to run this experiment for five months, especially if the estimated time continued to climb as new miners appeared,” he says.
Peterson isn’t convinced by Chia’s green credentials, saying bitcoin miners are unlikely to switch because it would require them to buy new hardware.
“Instead of displacement, it’s an additional crypto to be mined,” he adds, “Aside from the energy usage, this results in mountains of electronic waste as hard drives will fail faster and more often. The poorest people in the world already live with mountains of e-waste pollution we dump on them and this is just going to add to that.”
Chia Network, the firm behind the cryptocurrency, didn’t respond to requests for comment.